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Insurance giants look for long-term care business

Giant insurance corporations are pushing into long-term care.

As part of its austerity song book, the Ontario government has pretended that there is no need to expand long-term care, complex continuing care, rehabilitative care, and other forms of care.  If any needs aren't met, it can all be solved, this fairy tale goes, by home care -- even while there isn't much of that going around.  


In that, there is opportunity for corporations.  If government won't insure it, they will - and make a nifty profit doing it. 

As noted in an earlier post, demographic change will drive the growth of long term care for the next several decades.  A recent  insurance industry report estimates that "the cost in current dollars, of providing long-term care over this timeframe (the aging of baby-boomers) is almost $1.2 trillion. Current levels of government program and funding support will cover about $595 billion of this total cost. As a result, Canadians currently have an unfunded liability for long-term care of $590 billion."

The insurance industry estimates that Canadians in long-term care facilities will grow from 300,000 to 750,000 over the next 24 years -- 150% growth.   They suggest that 170 new long term care facilities have to be opened each and every year over the next 35 years (6,000 in total).   (The Conference Board has also estimated that long term care  would grow at about the same rate in Ontario -- from 98,000 residents now to 238,000 in 2035.)

That's a lot of business -- and a lot of money.  It will dwarf the current hospital and long term care industries.   

Naturally, the private insurance giants think they should be involved, via private long term care insurance (and likely other private financial products as well).  Government can't do it all, they warn.  

They recommend that "governments in collaboration with key stakeholders develop an awareness campaign to educate Canadians on the responsibility they will have for funding their own long-term care."  Government (and taxpayers) should drum up business for the insurance industry is perhaps the idea.

The report goes on with recommendations that are decidedly privatization friendly: 
  • Any government funding of long-term care should be directed to individuals rather than funding institutions directly.  
  • Private delivery of long-term care should be encouraged, and
  • Governments should not regulate price for private delivery of service  -- to encourage a vibrant private long-term care market in Canada
With government walking away from the care we need, this may well become our reality. Indeed, the long wait lists for publicly funded long-term care and the spotty coverage of home care in Ontario suggest this is already happening.

But does private insurance work for long-term care? More on that later.  

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